11:00 ESTMr. Mann: First we better get one thing clear. I am not a witch. [Laughter]. I’m just you. We’re just all folks here, huh? One of the reasons people, including foreign journalists seem to be turned out of this election is because of the crazy things that seem to be happening.

I just returned from speaking in London and in Seoul. Of course foremost on their mind is the tea party, but the real question in their mind is what in the world is going on in your country? Here you elect this extraordinarily attractive and promising African American President of the United States that transforms global opinion toward the United States, and now, 19-20 months later he’s fallen from grace, the love affair seems to be over and the wackos, they say, seem to be on the verge of taking over the government. Please explain.

That’s what I’ve been asked to do recently in London and Seoul. Let me take a couple of minutes to suggest to you why it’s not all so mysterious as to what’s going on.

Mid-term elections are strange events for those of you coming from other countries where particularly parliamentary governments, where there is a periodic election every three years or four years or five years for the government, and that’s it. If you manage to assemble a single party majority or a coalition government, you don’t have to face the electorate right away.

We’re different with our mid-term elections and we have a traditional loss of seats by the President’s party at mid-term. We’ve had exceptions. 9/11 created one; in 1982 the Republican threat of an impeachment and a buoyant economy created a modest exception in 1998. Before that you have to go all the way back to 1934 and after two years of Franklin Roosevelt’s administration, in the depths of the Great Depression. So it’s normal to have a fall-back. Usually a consequence of a very different electorate, much lower turnout, and the people who don’t turn out at mid-term who did in the previous presidential election are those that provided the margin of victory for the winner. So you have this surge in a presidential election, then a decline afterward.

A second reason, a relevant fact, is there are a lot of Democratic seats at risk. Democrats are now, as a result of their victories in 2006 and 2008 when they picked up a net of 50 additional seats, they’re really above their natural strength. They’re holding congressional districts that have traditionally voted Republican in presidential campaigns, so they’re vulnerable. They have to defend a large number of seats with conservative Republican constituencies.

The third factor is simply the state of the economy. I can’t over-emphasize the importance of this. If the nascent recovery that we saw at the end of the last quarter of 2009, the first quarter of this year, had continued with growth in the 3.5 to 5 percent range with private sector jobs adding maybe 200,000-plus each month, that sort of moment of optimism in the midst of deep pessimism from the worst economic recession since the 1930s might well have continued and this would be a kind of middling, mid-term loss, yes, but not one in which the majorities of the Democrats in both House and Senate would be threatened.

So the state of the economy, the unemployment, the underemployment, the sort of stagnant income, the declining income for some families, the decline in personal assets, in retirement funds, stock holdings and personal savings. All of that has created a great sense that nothing is working in this country. People are very bleak about the state of the economy.

Given that, given those three factors -- traditional mid-term loss, large number of Democratic seats at risk and a really abysmal economy, both objectively and subjectively, and no other factor we would predict major Republican gains in the House and the senate. The only question would become would those gains be large enough to change the majority, to put the Democrats out of power in the House and/or Senate.

Therefore, I think we have enough evidence based on that alone, but confirmed by a whole host of other information, that leads me to believe that we’re looking at a range of 35 to 50 seats in the House; 39 needed for a Republican majority. If I had to make a point forecast it would probably be in the mid 40s. But, if you will, the range of possibilities goes sort of beyond that and nothing is guaranteed. We can talk a bit about that.

In the Senate, there are now probably as many as 13 Democratic seats that are being contested seriously. For a while there seemed to be 10, but others got added like Connecticut, which wasn’t supposed to be close; and West Virginia; and Wisconsin, where initially it was thought Russ Feingold would win that race easily. So there are plenty of seats up, and yet if you look at those individually you see three, four that the Democrats, five are very likely to hold. Including Connecticut and California and Washington and probably West Virginia.

Anyway, you look at that and you say the range we’re looking at is probably five to ten, and again, a sort of point forecast would be in the range of eight seats or so. But again, in both cases it could tip one way or the other. Anything is possible. It’s one of the reasons why this election is so interesting. It’s interesting because it’s not going to be like those five congressional elections starting in 1996 and ending in 2004 when there was almost no shift in the party strength in the House and Senate. Very little, and then suddenly boom, boom, boom -- three elections in a row with substantial national forces operating.

So I think the election is interesting because we know it’s going to be a big change, but we don’t know just how big. Some have, looking at a recent, in fact yesterday’s sort of Gallup likely voter model, which is truly an outlier in the world of polls. It’s just nutty. It showed the possibility of a 15 percentage point lead for the Republicans in the vote, which at the very time the Washington Post was coming in at 6 and Newsweek actually had a Democratic advantage. So they’re all over the board. It increases the uncertainty that we have with respect to this. But we also know it’s really consequential for the next two years and potentially for 2011 and beyond.

How it comes out exactly is going to depend upon really four factors, which way it goes beyond the obvious point that there will be large Republican gains.

One is turnout, the relative turnout between the parties. You’ve heard this story before. Democrats are discouraged, Republicans are enthused. That’s half accurate. In reality, all indicators are that the Democrats are actually pretty enthused. They may not get to the point they were at in 2006, but for them, traditionally, they’re going to have a reasonably high mid-term turnout. It’s just that the Republicans are really enthused and seem to be on the way to producing a turnout substantially higher than they’ve had in recent years. It’s partly the negativity bias in politics. It’s easier to get involved and concerned when you’re mad as hell and not going to take it anymore. It was hard for Republicans when they had their President in office and then their party and the majority in Congress. Things weren’t going well for some of them, but who are they going to take it out on? They didn’t want to take it out on their own party. So that has certainly made a difference.

That’s the natural individual motivation for turnout -- Republican advantage. Then it’s the “get out the vote” efforts which might in regions produce two to three percentage point addition to the electorate if it’s done well. We think Democrats have a better shot at that. We also know presidential visits can make a difference, not in changing anybody’s mind, but in helping to mobilize turnout so it’s worth paying attention where the President travels to.

Second is money. Democrats have had an advantage throughout the year. Their candidates have raised a lot of money; the congressional democratic campaign committees have done better than their sister Republican committees. It was looking pretty good until we saw in the last couple of months the mobilization of outside groups. Some so-called 527 organizations, political organizations. Others now operating under the cover of 501C4 status which allows one to maintain the privacy of their donors. And in the last couple of weeks we’ve seen like about a seven to one Republican advantage in advertising.

At the margin, that could make a difference, but Democrats have enough money budgeted to be on TV and to make their case. I don’t think they’re going to be blown out because of money.

Third is the campaign frame. Mid-term elections are traditionally referendums on the performance of the government. Democrats are trying desperately to turn it into a choice, not a referendum. For obvious reason. The Republicans are no more popular, indeed less popular, than the Democrats. The public has no confidence in Republicans as a party. Republican partisans embrace them enthusiastically. But the other swing voters, it’s referendum. That’s why the effort of Obama and others to scare people about the tea party and extreme positions taken by some candidates.

The odds of changing the frame for those independent voters who don’t pay much attention to politics and react in a fairly simple, pragmatic way, are long, but they’re trying.

Finally, just the nature of the candidates. These are races contested by individual House and Senate candidates and we just don’t know how that’s going to work out.

Again, all that does is introduce some uncertainty, but the bottom line is it’s going to be a good, odds are it will be a very good night for the Republicans. However, the expectations are so high that if they fall short of taking the majority in the House it will be a real downer for them, even though in some respects they might be better off in the minority than with a narrow majority in the Congress and come to share the blame for additional economic stagnation.

I’m going to say one other thing briefly and then just turn to your questions. Could it have been otherwise? That’s the question I got asked constantly when traveling overseas and here. That is, is this a real consequence of a president who wasn’t ready for prime time? You’ve heard the critiques -- inflated campaign promises, misguided priorities, why didn’t he focus like a laser on the jobs issue and set everything else aside, ideological overreach, a government takeover of health care, tactical failures in dealing with -- why did he let them write the legislation themselves? Why didn’t he do it? Well, that’s an easy one to answer. We have a Constitution and Congress is the first branch of government, but that’s another story. Communications breakdown. No compelling narrative to keep people attached.

There’s a kernel of truth in each of these but I would assert all of them are wrong and unjustified and don’t take into account the real decisions that he was confronted with and made. I believe that had he done what they wanted them to do on all of these, it wouldn’t have affected the basic dynamic of this election. Only if he could have taken steps that would have produced a quicker and more fulsome recovery with job creation. That is if he could have gotten a stimulus above a trillion dollars. If more money could have been sort of pumped directly into job producing activities, yeah. But the chance of him getting that through Congress were close to zero given the nature of our political system.

We have parliamentary like parties, but we have congressional procedures. So having a majority to put your program in place is not sufficient. You have to have super majorities in the Senate. And when you face a unified opposition party it’s tough.

So it couldn’t have been different in my view. It’s playing out in a way that’s reflected in experiences in many parts of the world. Slow, painful recoveries from deep financial and economic crises impose political pain on whoever is in office and that’s the Democrats right now.

Full stop, your questions.

Globovision Venezuela: My name is Sonia Schott with Globovision Venezuela.

I was wondering if you can comment on the immigration factor. What kind of role will it play in this election, or is America becoming more conservative because of these issues?

Mr. Mann: For the most part the sort of anti-immigrations even nativist sentiment that’s apparent among some activists, some tea party activists and others, and manifest in individual states in particular, will basically serve to bolster the politicians embracing those positions. That is anti-immigration positions. But it probably won’t change a lot of votes because it tends to reinforce rather than to change.

I think the factor that’s of greater concern to Democrats in the short term is there is new evidence now that turnout among Latinos who do favor by a two-to-one majority the Democrats, is likely to be even lower than other elements of the Democratic coalition. If those surveys are correct, then that will work against the Democratic party because there will be an anti-immigration sentiment helping to increase turnout and boost Republican candidates.

I think over the long term it’s really quite a different matter. I think this is the potential of a short-term gain in 2010, but a long-term loss for the Republican party. Particularly since if the Republicans take control of the Congress, one or both houses, it won’t stop President Obama from advancing a comprehensive immigration package. And if as seems likely Republicans work to kill it, filibuster it to death, I think that will have a mobilizing effect on the Latino community in the presidential election.

Phoenix TV: I am Ching-Yi Chang with Phoenix TV.

I would like to know; recently the House passed a bill against China’s currency. I’d like to know why this timing? Also what if the Republicans become the majority in both Senate and House? How will that affect this bill? Thank you.

Mr. Mann: It’s fascinating, but the support for that bill was very strong in the Republican party as well as the Democratic party. There is a lot of push-back now in America from people who believe China isn’t playing fair. It’s protecting its own industries, state-owned and others; it’s using government procurement policies to advantage its country; it’s maintaining a depreciated currency, giving them advantage in promoting products abroad; and so ironically what you have is the administration trying to cool the tempers of the Hill, but they’re really quite prominent.

We usually think of the Republican party as being the party of free trade and the Democrats being the protectionist party. The recent Report on Foreign Policy and Public Opinion by the Chicago Center on Global Affairs revealed what we have seen in other polls but seldom notice. That is among rank and file party members, Republicans are much more opposed to free trade than Democrats. They’re also more suspicious of globalization, of international organizations. So while certainly John Boehner was a strong proponent of free trade agreements and sort of healthy measured relations with our trading partners including China, the pressure, especially from newer members coming in, the populous right in the Republican side of the aisle is that that pressure will almost certainly intensify. As long as we’re doing bad economically and we continue to have the extraordinary imbalance in our trade and current account.

TVA Canadian TV: Richard Latendresse, TVA, Canadian TV.

You just served on the topic earlier. I’d like you to talk a little bit more on the Republican brand. You implied that it’s not necessarily better than the Democratic one. And by extension, can you tell us more about the tea party anger and the impact it could have on the process?

Mr. Mann: Republicans, people who identify as Republicans, and the rest of the country, does not have have “a” leader of the Republican party who can define it, create its brand. There is Sara Palin, to be sure; there is Mike Huckabee; there is Mitt Romney -- erstwhile candidates for the vice presidency or the presidency. But no one knows who John Boehner or Mitch McConnell is. Then there’s George Bush, the former President, who’s very unpopular in the country and among many Republicans who felt he somehow sold out, the government grew during his tenure, deficits grew. We went from surpluses to deficits. So there’s anger there. So right now the Republican party is in many respects embracing the sort of basic gut instincts of the tea partiers which are we’ve got to take America back, we’ve got to take our government back. Query back from who? In this case it’s back from Washington. It’s sort of anti-status is what we’re getting, and anti-elitist is the sentiment.

Now it’s a little tricky because the Republican party is pretty wired with elites, particularly in the business community, but there are a lot of veteran Members of Congress who are Republicans as well. So it’s a very tricky matter.

What they can agree on is they want much smaller, less intrusive government; they want taxes low or lower; and they want Washington to pay attention to the Constitution and its inherent limitations on governmental actions.

Well, on the other hand, many of the tea partiers are strong religious conservatives. About half of them. We had an interesting study released yesterday. But others are more libertarian and don’t want government active in any sphere. Some kind of have a neo-conservative, Bill Chrystal aggressiveness in terms of national security and foreign policy. But others just want to come home and tend to our problems here. The libertarian sentiment, as Ron Paul reminded us in the presidential election, is for a much lighter footprint, American footprint around the world, and to come home and deal with our problems here.

Some close to the business community want to change our immigration laws and be more welcoming. Worried about the brain drain. Others are nativist and just angry about the real America changing because of the influx of people who don’t look like us.

So it’s a really disparate group and there’s no credible basis for governing in there.

So they’re about to do well in this election almost entirely as a consequence of their being out of office during very tough times. But how they govern in a practical sense is quite another matter.

As far as the Democrat’s brand, Obama is being demonized as this wild-eyed socialist secular -- Glenn Beck’s got the tree all worked out. But somehow we get to Nazis and Hitler and we get back to Kenya and so on. The reality is Obama’s very much like Clinton, pretty non-ideological, center left President who like leaders of emerging and developed countries of all ideological stripes had to take extraordinary steps to deal with the financial and economic crisis. That meant government had to be much more involved in ways that leave Americans really scared.

Yomiuri Shimbun (New York): Jo Geni, Yomiuri Daily News.

I was just wondering what you think the role of the media is in this election as opposed to the 2008 election, and especially the role of some conservative media like Fox News, and you mentioned Glenn Beck earlier.

Mr. Mann: I think it’s very similar. Fox News has become an extraordinarily consequential news organization in this country. First of all, it’s financially successful. I think last year $700 million of profit for a small cable channel with a few million regular viewers. But those profits apparently exceeded the total of the major network profits. So it’s very successful. It has loyal followers. It has prominent hosts like Glenn Beck and Sean Hannity and Bill O’Reilly. Now I think every erstwhile Republican presidential aspirant is signed up, except for Mitt Romney, is signed up as a paid consultant on Fox News. And I know it will shock you to learn there are no Democratic presidential candidates, because we only have Barack Obama and no one’s challenging him. But there are no prominent Democrats involved in that. It really has become just quite amazing the impact that Glenn Beck in particular has had. But you put that together with talk radio where Beck and Hannity and Rush Limbaugh and others generate huge crowds, and it serves to mobilize and energize a very conservative constituency.

Then there are sort of blogs associated with that, and I think it tends to lead politicians, Republican politicians, to eschew any kinds of negotiations or dealings with Obama or Democrats. The activists are saying no compromise. Stick to your principles. And to demonize their opponent so it becomes all-out war. I think the effect of that Murdoch entity and associated new outlets has been profound. The efforts of MSNBC to try to match that have been pretty pathetic. The broader media sort of struggles for balance and for sensationalism to get more hits on their web site so they draw more ad revenues. So it’s not inspiring.

The real sad thing is that most Americans don’t go looking for news about politics or public affairs, they could care less. And those who go looking tend to self-select themselves.

Interestingly, we’re having the battle of the Washington rallies. It’s Fox News in the form of Glenn Beck now versus Comedy Central in the form of John Stewart and Stephen Colbert. So be prepared to go to the Mall on October 30th. Compare it with the Beck rally of several weeks ago.

World Business Press Online: Zoltan Mikes, World Business Press Online.

I would like to ask you what will be the impact of tea party on the Republican senators and congressmen? For example we saw that John McCain has radicalized his positions and can be expected because of the radicalism of Glenn Beck, Sara Palin. Also the mainstream Republic congressman will go radial. Doesn’t it endanger the Republican party that it will lose the middle of the normal people?

Mr. Mann: Assuming people in the middle are normal. In fact some are so normal they’re in the middle because they don’t pay any attention to left or right or center, and just kind of put their priorities on their jobs and their families and their local communities. Don’t pay much attention at all.

But your broad point is really correct. You’ve heard a lot about the partisan polarization of American politics. It’s been underway for decades. But it’s not always symmetrical. There were periods in the ‘70s when it was the Democrats who were veering left. Now we have the Republicans veering sharply to the right. We have a center left Democratic party and we have increasingly a conservative right Republican party. Encouraged and pushed by groups that challenge moderates in primaries and who threaten sort of punishment for not sticking with the party. Republicans were remarkably unified over the last two years in opposition, in spite of what you could say was a national crisis when you ordinarily could expect some coming together.

If they win big in the election after doing that with the tea party mobilization, I don’t see how they change their strategy. I think they will be emboldened to continue to oppose, to try to undo what President Obama and the Democrats enacted, certainly with respect to aspects of the health reform, but in other areas as well. So it will be a battle, and Republicans run the real risk of marginalizing themselves for a presidential election. If all of their candidates go running after the tea party, they will find they’re appealing to a distinct minority of the American public.

Nikkei (New York): My name is Makoto Kajiwara from Nikkei newspaper.

My question is also on the tea party movement. You said the economy is one of the main drivers of this election. So my question is what is the most important economic factor that supports, that is supporting the tea party’s growing popularity now?

Mr. Mann: It is overall fear of America being in decline. Of the insecurity of jobs. Of the potential of downward mobility. Of declining assets. Of reduced possibilities for their children and grandchildren.

Coming out of that is, ironically, a resentment of government interventions that help people not just above, the financial community, the bankers, but that help sort of people below. So increased money for foodstamps and unemployment insurance and health insurance subsidies plan not yet implemented for low income working families. All of these, assistance in avoiding foreclosures on mortgages, subprime mortgages. What you pick up in interviews with tea party activists is a kind of resentment. We’re struggling, but we’ve lived up to our end of the bargain, we’re paying our mortgages and not living off the government, and here you’re taking our taxes and giving it away to others. I think the overall economic distress and pessimism creates an environment, as it has throughout American history, for groups of citizens, always sort of smallish groups but who can appeal to a somewhat larger populous because of the generalized concerns to take up one form of populism -- right wing or left wing populism. It’s there. We’ve seen it. We’ve seen it throughout American history.

And remember, combined with that are two other things. One is, there has always been a strong anti-statism element. We saw it in the anti-federalists who opposed the ratification of the Constitution at the founding of our country. That sentiment has bubbled up throughout the course of American history.

Secondly, we have a tendency of some people to be attracted to conspiracy theories of one kind or another. In the late ‘40s and ‘50s it was the communists have taken over the country. That was the John Birch Society. But we had strong groups opposing Franklin Roosevelt back in the ‘30s. We had the anti-Masonic movement in the 19th Century. So all of these various tendencies have come together. Some tea partiers are perfectly reasonable Americans who are concerned and have very conservative views about what government should or should not do and very definite ideas about what should be done, but they don’t add up. They don’t have much information about the composition of the budget and how you could balance it without increasing taxes or doing anything to change social security or medicare, which many of them fervently believe. But that’s the nature of the beast that creates this sort of a number of people understandable scared and looking for help. Others get pulled in who sort of come out of the woodwork. The Montana Militia, the remnants of the Birchers and patriots and so on. But they’re not the major part of it. It’s a very decentralized group.

Sunday Times: I’m Lucy McCalmont with the Sunday Times.

I was just wondering if you could comment on the outlook for female candidates come November. There were reports earlier this week that for the first time in three decades the number of women in Congress will actually decline. And also speak to the fact that Obama seems to be losing support amongst white women more than any other group this fall.

Mr. Mann: Because it’s an election that will turn out a number of Democratic incumbents and put only a handful of Republican seats in play for potential female Democratic challengers, and because women have been disproportionately elected within the Democratic party, it’s a natural that you’re just going to see a decline in the number of women elected officials. Likely in the House and the Senate, although we have a number -- Who knows? Sharon Angle may win in Nevada. I feel confident Christine O’Donnell will not. But the odds are in the House in particular we’ll see a net decline, and certainly in state legislatures where Republicans are expected to pick up 400, 500, 600 seats. It’s not that there aren’t Republican women running, it’s just that there tend to be more women active and running in the Democratic party.

I’m a bit dubious of, I don’t think the evidence on relative sort of decline in support for Democratic candidates among women compared to men is that great. What’s happened is you maintain the gap between men and women. Women continue to be more Democratic in their orientations than men. It varies at times. Sometimes it gets the single digits. Sometimes it’s as high as 15 percentage points.

There have been one or two surveys that showed maybe a point or two more decline among women. I think in general it’s the white part of it more than the women. I’m not suggesting sort of a strong sort of racial motivation, but I do think some of the resentment that’s out there in the face of this economic insecurity is that we’re kind of giving our resources and our taxes to people who don’t deserve it. And the very fact that our President is African-American I think sort of leads some people to have a reinforced view about this.

To the extent there is decline among white women, it will be among conservative Republican white women. It will not be among Democratic women or liberal women.

My question to you is what happened to Obama’s pledge to bipartisanship? To working both sides of the aisle? I remember his famous speech on 2004 about red states and blue states and working together. Why couldn’t he sort of fulfill his promise of reforming Washington? Was that naïve? Did he face unexpected opposition by the Republicans? I remember even the bailout bill had I think three votes only from the Republicans. Why did that happen?

Mr. Mann: Good question. If it was more than a sort of campaign tactic, if he expected he could pull it off, then it was terribly naïve, just no question about it. We live in a deeply polarized era. Mitch McConnell, the Republican leader in the Senate announced really to his colleagues before Obama was inaugurated that the strategy was to oppose in unity every initiative, major initiative that Obama proposed, and that included the stimulus. At that time Obama had Democrats, had 58 Democrats in the House. That was before Al Frankin’s election was settled and Arlen Spector switched parties. He had to have some Republicans. Fortunately he was able to talk to a couple like Show and Collins and Spector who then changed parties, but it cost him a lot. The stimulus was diluted as a consequence of that super majority requirement.

But Obama actually began his presidency reaching out, meeting first with Republican leaders, trying to pull them into negotiations on the stimulus, trying to entice them into health care negotiations. But they had a strategy of opposition. The problem he ran into is he kept trying and trying and trying. That tended to stretch out the legislative process and it looked so tawdry as he had to try to piece together deals in his own party, that it diminished the final product as far as the public was concerned, and angered some of his Democratic base who said hey, your only support is with us. Why are you spending all your time with Republicans?

I think it was naïve, but it was his brand. As you point out, in 2004 he gave the most electrifying keynote speech at a national party convention in decades. I was there and I saw the reaction of the crowd and felt my own. It was an amazing performance that set him on the path to the presidency. You can’t walk away from that. That’s who you are. That’s the argument you're making. I think he really thought he could do something with that and that was naïve because these are hard-ball politics, and now in the weeks before the election he’s recognized that and is playing that game as well.

Die Welt: Ansgar Graw from the German newspaper Die Welt, The World.

You have said and explained in which way presidential visits can make a difference in elections but earlier this year the New York Times reported, and it wasn’t a joke, it was a cover story, that President Obama offered to some Democratic congressmen his support by not visiting their districts. How does it fit together?

Mr. Mann: It fits perfectly. It shows that the states and constituencies are highly diverse. Some Democrats are in Republican territory where Obama is very unpopular and his agenda, and they survive only by dealing with and responding to sentiments in their own constituency. Some of them voted against the health reform package. So the judgment is there are these dozens of Democrats in very vulnerable seats where he can’t help them in terms of showing up because it would call attention and nationalize the campaign debate when the local Democrat is trying to localize it.

So what I was saying is, watch where he goes. He will go to areas within states that are competitive, but in sort of urban areas, university campuses where he can really rally the Democratic vote. That’s why he went to Madison, the University of Wisconsin. Expect to see that in Pennsylvania and in Colorado. That’s how he does it.

Scholars have really very systematically tried to track the effect, much of the research was with George Bush in his mid-term, initial mid-term. And it appears to have that kind of a difference. It’s not massive, it’s not general, it can’t happen all over the country. It has to be focused on areas where it can be positive.

ARD: Johanna Huesch from ARD German Television.

Let’s assume that the Republicans will get the majority. What is your scenario in the up-run then to the presidential election? You always sit on the sideline. It might be even better for the Republicans not to get the majority. They might be blamed for the bad economy as well. What is your scenario?

Mr. Mann: One, we know from history that there is no correlation between a mid-term and a subsequent presidential election. We’ve had examples of Presidents running into early difficult. Ronald Reagan, Bill Clinton, sort of suffering mid-term losses and then going on to comfortable, in Reagan’s case landslide, reelections.

Obama’s prospects in 2012 will rest heavily on just how slow the economy is and its recovery. If we pick up enough momentum to get above three percent growth and we’re finally beginning to have a net addition to the job force, the work force; unemployment gets below 9 percent heading toward I; and the gloom lifts -- housing prices stabilize, the stock market doesn’t plunge another two or three thousand points. People have some optimism, then the odds favor him. He’s also favored because of what we discussed earlier. The Republicans being pulled and pushing toward their conservative, very conservative base.

Now if the Republicans have the majority they’re going to investigate, they’re going to subpoena, they’re going to try to undo much of what the President is doing, but they run a high risk with that. The Republicans did that with Bill Clinton, going so far as to impeach him. By the way, they held the impeachment vote in a lame duck after, even after they’d lost seats in a mid-term election with a Democrat in the White House, it was extraordinary. But it was clear they were going to do that ahead of time because of what was transpiring. So they could easily overplay their hand and discover that gee, Americans are seeing some good in this health care, and yeah, we like that part and that part and that part. We just don’t like socialism. Or government takeover. It may start looking different.

So yeah, it would be unpleasant, he’d be fighting rear guard action, but even if Democrats hold on to majorities in the House and the Senate they will be s narrow that the possibilities of pushing ambitious legislation will be nil. Unless it’s something that enjoys natural support across the parties.

You’ll find some areas. We might be able to renew No Child Left Behind, finally; reauthorize. We might succeed in additional subsidies for green energy and conservation measures. We might be able to get a few free trade agreements passed with support on the Republican side. Some things.

But in general the focus of American policymaking will shift from the Congress to the executive branch. The President will lead by using his executive and administrative tools. That’s where climate change will have real action in the regulatory process. That’s why he will spend a lot of time dealing with economic issues globally, in trying to work out cooperation that will lead to some rebalancing and growth.

It’s just extraordinary to see the movements of the last 24 hours after the IMF Report came out. A real concern about premature austerity and the possibility of another real slow-down. So you’re getting central bankers around the globe now looking for extraordinary means of stimulating the economy. We had sort of Martin Feldstein, the quintessential establishment Republican economist at a conference I think it was day before yesterday saying we need another stimulus. He doesn’t like Democratic style stimulus, but he’d be happy to have a payroll tax holiday, and Democrats would too. That’s a good policy.

So I think you’ll see things operate differently in the second year and Obama might gain some advantages from playing off the “just say no” Republican majority.

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